FAP, May 21 (Editor Zhao Hao)-Ben Broadbent, deputy governor of the Bank of England in charge of monetary policy, said on Monday that if the second round of inflationary pressures falls as expected, the bank will be able to cut interest rates "sometime in the summer".

Broadband, whose 10-year term as vice president ends on June 30 this year, said it was his last speech as a member of the 13-year Monetary Policy Committee (MPC). (3-year external member + 10-year vice president)

Earlier this month, Bank of England Governor Andrew Bailey hinted that the bank could cut interest rates by 25 basis points for the first time at a meeting on June 20 at the earliest. This meeting is likely to be the last before Broadband's term expires.

Broadband said that whether to cut interest rates from the current 16-year high depends on the stickiness of wage growth and whether companies shift high wage costs to prices. "the sooner real wages make up for losses during inflation shocks, the sooner normality will return, and the sooner the second round of inflationary pressures will subside."

Broadband said in the question and answer session that the economic performance in the past six months has been "reassuring" (reassuring), and inflation has been since late 2022.RetropiearcadecabinetThe high of .1 per cent has fallen steadily, which Mr Broadbent attributes to plummeting energy prices and a slowdown in food prices-two indicators that are difficult for the Bank of England to control.

Broadband released a chart saying that real pay "will increase significantly this year" and is expected to accelerate the process of reducing inflation. The regional survey also shows that the ability of companies to pass on wage costs is significantly lower than last year.

The UK will also release a number of sets of inflation and pay data ahead of the June meeting. Said Broadband.Retropiearcadecabinet"if things continue to go as expected, interest rates may fall sometime in the summer."

The Bank of England previously believed that there were still upside risks to the near-term inflation outlook from geopolitical factors, although so far developments in the Middle East have had a limited impact on oil prices.

Broadband mentioned that climate change could trigger inflationary shocks in the future, such as the fact that the climate has caused huge fluctuations in some food prices. He also revealed that the MPC discussed the huge investment needed for climate transformation and the possibility that "financing needs push up real neutral interest rates".

Michael Saunders, a former member of the Bank of England's monetary policy committee, also wrote in the report that he thought a "first drop" in June or August was very possible, and even suggested that the Bank of England could break the habit and act ahead of the Fed.

Two weeks ago, the Swedish central bank announced that it would cut its policy rate by 25 basis points from 4% to 3.75%, the first cut in eight years and the second central bank in the G10 to ease monetary policy.

Saunders said that inflation in the UK has been below central bank expectations in recent quarters, unlike in the US, and is likely to return to its target in the next month or two. "more importantly, recent economic growth in the UK is much weaker than in the US, so the tension in the UK labour market will subside faster."

The Saunders expects the Bank of England to cut interest rates by 75 basis points by the end of the year and reach 4.5 per cent by the end of the year.